End of year is upon us, and it’s time for the dreaded, often onerous accountant meetings. It’s a time when we’re reminded of the importance of our financial advisors, especially our accountants. If you’ve already established a relationship with an accountant, you may want to ask yourself, when was the last time I assessed if my current accountant is the ‘right fit’ for my current financial reality? And if you’re in the process of choosing a new accountant, it may be a good time to determine what you’re looking for in such an important advisor.
Here’s a list of the top 10 questions you’ll want to ask when you’re choosing an accountant.
7 Questions to Ask a Potential Accountant
1. What experience do you have dealing with other small business owners/ professionals similar to myself? What are some of the typical issues that arise for clients like me?
It’s important to understand your accountant’s history and level of expertise with similar clients. This will help you assess whether he/she can provide advice relevant to your situation. You are not just looking for someone to file tax returns.
The accountant’s experience with similar clients will help you assess whether they can identify and address tax planning topics that you may not have considered. This information will also help you assess whether they can optimize your tax situation and legally minimize your tax obligations.
2.Given the current tax regulations, what should my tax objectives be?
This question is important because it serves to establish tax planning goals that can be applied when evaluating various tax planning strategies and structures (e.g. setting up trusts or investment holding companies, etc).
You should be looking for a clear explanation of the tax issues relevant to your circumstances, and help understanding the advantages and risks of different tax planning strategies within the context of current tax regulation. If their answer is brief, ask them to explain more; and if their explanation is overly technical, ask them to explain it in layman’s terms. You want to find an accountant who understands not only tax law, but how to make it simple for you to understand and follow.
IP Private Wealth is a Family Office—a team of wealth advisors that operates as a round-table board of advisors. We work closely with our client’s tax accountants, helping them reduce preparation costs and filing timely & accurate returns. The IP Private Wealth team looks at your overall business and lifestyle goals, and equips you with the right questions, requests, and action plans. Learn more.
3. What Information do you need to prepare my annual tax filing, and when do you need it?
The Accountant’s response to this question will help you assess whether s/he has an organized tax filing process to minimize errors and filing delays. You do not want a professional accountant that is not organized and/or does not anticipate all information needed to avoid delays or errors in tax filings.
It’s valuable to establish a mutual understanding of what you need to provide, and when. This will help you organize and prepare for each year’s tax filings, and ensure your accountant can work efficiently on your file. Your accountant should be able to provide you with a checklist of needed information and documents, which you can then forward to your own financial team, spouse, or bookkeeper.
4. What tax laws and interpretations have changed since last year, and how do they affect me, my business and my family?
This question is important because it will help you identify new tax issues or concerns arising from changes in the tax regulatory environment. It will also help you assess whether your accountant is up to date with changing tax laws and legislation.
Ideally, your accountant will answer this question with a summary of significant developments relevant to your situation and a clear explanation of the impact of these changes. Your accountant should also be able to recommend strategies to mitigate their impact. Again, don’t hesitate to ask for clarification; when an advisor can explain a concept in simple language, it can be an indicator of how well he himself has grasped the concept.
5. How do you coordinate with my Wealth Advisor and other professionals I engage?
This question will help you assess whether the accountant seeks to have a holistic understanding of your overall goals and circumstances, and ensure any recommended tax planning strategies are in line with your ‘bigger picture’.
When the accountant answers this question, watch for their genuine interest in speaking with others; they should be familiar with this kind of request, and be open to working with the other types of professionals that you engage.
6. What is your availability, and what support staff do you have to address tax-related questions and concerns as they arise?
You will need timely access to competent our tax advice in the event of an ad hoc tax related matter or question. Even the greatest accountant isn’t of use to you if you can’t get quality advice in real-time.
You should be looking for evidence that the accounting firm has adequate staffing and resources to handle tax matters and questions as they arise.
7. Is there a way to minimize the annual cost of filing my returns?
Your accountant should be willing to work with all your other advisors to ensure the information needed is complete and accurate. Working with a wealth advisor that provides robust tax reporting should help reduce cost by eliminating the tedious task of bookkeeping and reconciliation that can take hours–billable hours that cost you money.
Conversations with accountants can be frustrating, boring, or even intimidating. But choosing one that gives you the quality of advice and service you’re seeking is crucial. Download these questions to take with you to your next meeting, or contact the IP Private Wealth team and discuss how our Family Office can help you prepare a 360° plan for your financial and lifestyle goals.
